Lately I’ve heard a lot about Universal Service Fund and Intercarrier Compensation Reform. (I’m hoping to have notes on the topic from a recent MN PUC meeting to post soon.) The concern is that federal funding goes to the right place to promote and sustain broadband in areas where it is difficult to make a business case to provide broadband. No one seems to deny that some areas need that subsidized support, the debate is on how it’s doled out.
But while in the industry we’ve been working on the rules to the game, someone else has been working on a game change at a higher level. Daily Yonder got the word from Stimulating Broadband…
A full $1.445 billion in federal funds slated this year for rural telecommunications project capital subsidies is now in jeopardy. The risk of steep cuts to 4 programs within the U.S. Department of Agriculture, each of which is now open to funding applications, is part of the partisan battle over the larger federal budget.
Unlike the discussions of USF and ICC, it seems that broadband isn’t the issue at hand – taxes and government spending are the big issues. I think that makes the discussion much more difficult. A discussion of USF and ICC is like sibling rivalry. We’ll argue hard, we all know the nuances, the rest of the world may or may not understand the fight. Taxes is like you’re dad coming in and telling you it’s time for bed. The nuance is gone, the decision has been made, the fight is over. My intention is not to trivialize USF and ICC – but just to say that tax talk is a game changer. And it may have an impact across the board…
Based on our review of the budget process, and off the record discussions with officials, StimulatingBroadband.com believes all of the programs are at risk of potentially substantial cuts:
Total RUS Rural Telecom Grants & Loans: $1.445 billion
Subtotal, Grants: $ 55 million, 4%
Subtotal, Loans: $ 1.39 billion, 96%Community Connect Grants: $ 25 million
Distance Learning and Telemed. Grants: $ 30 million
Broadband Access Loans: $ 700 million
Telecommunications Loans: $ 690 million, total
Direct Loans, Hardship Loans $145 million, subtotal
Direct Loans, Cost of Money Loans $250 million, subtotal
Guaranteed/Insured Loans $295 million, subtotal